Glove-maker Rubberex to raise RM31mil for expansion

Rubberex Corporation makes nitrile and rubber gloves for industrial and household use.

KUALA LUMPUR: Glove-maker Rubberex Corporation (M) Bhd plans to utilise the proceeds of RM31 million from its proposed private placement for capital expenditure to expand production lines for nitrile disposable gloves and defray the estimated expenses of the corporate exercise.

The small-cap glove maker, in a filing with Bursa Malaysia, said the proposed private placement will enable it to raise the necessary funds to part finance the capital expenditure required.

Rubberex Corporation makes nitrile and rubber gloves for industrial and household use.

“The board believes that the increase in nitrile disposable gloves production lines will contribute positively to the future earnings of Rubberex Group,” it said.

The company has proposed a private placement of 25.21 million new ordinary shares of Rubberex, representing 10 per cent of the total issued shares.

The board believed that the proposed private placement is the most appropriate avenue to raise funds for Rubberex.

It would also partially reduce interest expenses if it were to take a bank loan to fund the revised expansion cost of RM32.4 million.

“As the proposed private placement is expected to be completed by the third quarter of 2020, it is not expected to have a material effect on the earnings of Rubberex group for the financial year ending Dec 31, 2020.

“Barring any unforeseen circumstances and subject to all the requisite approvals being obtained, the proposed private placement is expected to be completed by the third quarter of 2020,” it said. - FMT